(CercleFinance.com) – The resilience of Asian markets this morning (Tokyo ended up +0.2%, Hong Kong and Shenzhen +0.3%), imitated by the US indices, with a Nasdaq almost at the balance and a Dow Jones up from -1.5% to -0.8% allow the CAC40 to rise above 6,650, ie 120Pts more than around 10am this morning.
The loss of -1.5% of the CAC is less than half the ground regained on Friday (+3.5%).
Markets seem to continue to bet that diplomacy will triumph and bring Russia down the path of de-escalation, as Ursula von der Leyen reiterates that Ukraine is destined to join the EU.
At the same time V.Zelensky is frantically waving the red rag of NATO membership while talks are being held at the same time between Ukrainian and Russian negotiators under the aegis of Belarus.
Among our neighbours, cautious optimism is emerging this afternoon: the DAX30 is a little more resilient with -1.2% and the London stock exchange limits the damage with 1% (London freezes the assets of oligarchs close to V. Putin cuts ties with Russian banks, Sberbank collapses by -75% in London, bankruptcy of its European subsidiaries seems imminent as its clients withdraw all their assets.
The Europeans continue to accumulate sanctions over the hours – taken over by the Swiss – while the fighting continues in Ukraine and Vladimir Putin has awakened the specter of a nuclear conflict on the continent by asking his army to put its deterrent forces on ‘alert’.
He is about to unveil counter-sanctions at the end of the afternoon as the ruble falls by almost 20% (it lost double this morning before the Russian central bank raised its key rate by 9.5 % to 20%).
The other initiative that can lead either to diplomatic success or to a dangerous escalation is the announcement that Europe plans to send nearly 500 M of lethal weapons and military equipment to support the Ukrainian resistance.
This is a pivotal moment for our Union’, said Ursula von der Leyen, President of the European Commission. But it would be a ‘proxy war’ which risks dragging bilateral relations to the ‘point of no return’, Putin warned.
Among the most significant shifts, Germany plans to extend the life of its nuclear power plants, to double its armament budget (100 MdsE envelope to modernize its army) and authorizes the export of lethal weapons for the benefit of belligerents of countries that receive military support from the EU.
It is a triple renunciation of ‘intangible’ principles that date back one or more decades.
In this context of extreme tensions, ‘investors continue to turn to the US dollar (it gains 0.5% against the Euro around 1.120 which however ends the day far from the lows, around $1.1140) as reserve exchange value, but also towards the price of gold ‘, forecasts Vincent Boy, market analyst at IG France.
The ounce of gold is currently evolving around 1900/1.905$ (nothing spectacular), while the barrel of ‘Brent’ gains more than 2%, around 100.5$.
Strategists therefore expect the financial markets to remain subject to high volatility this week, depending on the information and rumors surrounding the evolution of the Ukrainian file.
In Paris, the armament specialists Thales and Dassault Systèmes sign the strongest progression of the CAC40, gaining respectively 12% and 3%.
In the news of French stocks, banking stocks are heavily penalized by the severance of ties with their Russian counterparts and the virtual impossibility of developing their business there: Sté Générale drops between -10 and -11%, BNP-Paribas -7 .5%, Credit Agricole -5%.
Highly exposed to Russia, Renault is still losing -7%, as is its supplier Valéo.
TotalEnergies (-6%) announces that it has won a maritime concession from the Bureau of Ocean Energy Management (BOEM). This contract concerns the development of an offshore wind farm off New York and New Jersey and was obtained for an amount of 795 million dollars (100%) jointly by TotalEnergies and EnBW.
Sanofi Announces Late-Breaking Phase III Data Presented at AAAAI Annual Meeting 2022 Showing Dupixent (dupilumab) Significantly Improves Signs and Symptoms of Eosinophilic Esophagitis at 24 Weeks, in Patients 12 Years and more.
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